Digital disintermediation in the South African short-term insurance industry : the readiness of the intermediary

Abstract

Digital technology has given many producers an opportunity to interface directly with customers, circumventing the traditional intermediaries. In recent years, digital technology has been attributed with the risk of disintermediation across different industries. The purpose of this research was twofold. The first was to gain an understanding of the readiness of the insurance intermediaries to the advent of digital disintermediation. The second was to establish in which adopter group these intermediaries are classified, in the Diffusion of Innovation model. An inductive qualitative study of intermediaries was undertaken. The data was collected through purposive sampling method and 13 semi-structured interviews were conducted with the interviewees. The interviewees represented the insurance intermediaries from different divisions with varying experiences. The feedback was analysed through thematic content analysis. The study concluded that South African short-term insurance intermediaries are not ready for the threat of digital disintermediation. Furthermore, the study concludes that the intermediaries are classified as late majority in the Diffusion of Innovations model.